Over the last week or so there has been a lot of buzz surrounding a leveraged buyout of computer manufacturer Dell by a consortium led by company founder Michael Dell. Michael Dell has been working with Silver Lake Partners and Microsoft to take the company private.

Michael Dell has previously been tipped to be using his current 16% ownership in the computer company he founded and as much as $1 billion of his own money in a bid to become the majority owner if the buyout goes through. A source that claims to be familiar with the negotiations says that the Dell board voted last night on whether or not to take the buyout offer.

For its part, Microsoft offered up this satement:

Microsoft has provided a $2 billion loan to the group that has proposed to take Dell private. Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

We're in an industry that is constantly evolving. As always, we will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform.

Some analysts believe that taking Dell Inc. private will allow the company to operate more efficiently and take its doings out of the public eye making acquisitions easier to accomplish. Dell Inc. has been a publicly traded company for nearly 25 years. If the buyout deal happens, the transaction will be the largest leveraged buyout in the technology industry since the global financial crisis hit.

The Wall Street Journal reports that the final deal is worth about $23 billion.

Dell Inc. was once the world's largest computer maker with a market capitalization of over $100 billion. The company has had a difficult time competing in the ever-changing computer industry and has seen its market share dwindle -- it is now the third largest computer maker in the world. No official comments have been offered on the buyout by any of the interested parties at this time.

I'm sure you already know this, Reclaimer, but for the other people puzzled by Kenneth's comment:

October 6, 1997:

quote: When it comes to the state of Apple Computer, everyone has an opinion.And at the Gartner Symposium and ITxpo97 here today, the CEO of competitor Dell Computer added his voice to the chorus when asked what could be done to fix the Mac maker. His solution was a drastic one.

"What would I do? I'd shut it down and give the money back to the shareholders," Michael Dell said before a crowd of several thousand IT executives.

I wouldn't call the Mac a failed product, but more of a product geared towards a small market.

The statement by Dell was at the time for a company not making any money with an insignificant market share, however today Dell is making money and can continue on doing so. The reason for the buyout is to make the company more nimble to market conditions and allow it to innovate where shareholders are unwilling to go.

Don't be surprised if Dell makes significant risky changes quickly after the buyout to reposition itself as a market leader. Granted I doubt they are just looking at regaining market share in the PC market, but probably innovating into a new market and even trying to appeal to the gaming market.

"The reason for the buyout is to make the company more nimble to market conditions and allow it to innovate where shareholders are unwilling to go."

Yup... Just look at HP and teh complete "Mucking Forons" on the board that basically destroyed the company that was. It wasnt bad CEO after bad CEO... It was the board hiring bad CEO after bad CEO and meddling.

Axing Mark Hurd was maybe the worst thing to happen to the company. All the work with Palm, completely undermined. Such a huge loss of talent and technology too, for how long did WebOS have the best method for mobile multitasking?

Ya, I still have fantasies about a modern Web OS. Palm's hardware always sucked, but picture this... Web OS, 2 years laters with lots of polish, speed enhancements ala IOS/Jellybean and modern hardware... Drool.

quote: I wouldn't call the Mac a failed product, but more of a product geared towards a small market.

A third of laptop sales in the US and 90% of OEM sales over $1000 isn't a failed product. If it is then its a failed product line that other OEMs want a piece of.

quote: Granted I doubt they are just looking at regaining market share in the PC market, but probably innovating into a new market and even trying to appeal to the gaming market.

I wouldn't be surprised if they tried to position themselves as IBM 2.0. The consumer PC market is highly unprofitable outside of the high end, and right now Apple and Lenovo are the only companies having any luck selling people computers over a grand.

Providing hardware and support to mid and large size business is a completely different story though. It makes up most of Microsoft's profits and its why IBM became so insanely profitable after dumping their consumer hardware division years ago.

Dell dropping the consumer end of their business will most likely drop the biggest boat anchor on their income. Focusing their attention on enterprise is the clearest path to profitability. It is something that they're very good at, and it happens to be way more profitable than chasing a consumer segment that chases the lowest price at any cost.

I'm pretty sure when Michael Dell made that statement, Apple didn't have anything close to a third of all laptop sales. Again Takin, when it comes to Apple topics, you ignore the context of the discussion entirely and throw yourself on any grenade.

Oh GTFO dude. In the context of 2013 he's talking about the Mac as a "failed product", not 1997. What he's saying was irrelevant by the early-2000s, but say anything positive about them at all and you're a fanboy. This isn't about being a fanboy, its about reality.

quote: I'm pretty sure when Michael Dell made that statement, Apple didn't have anything close to a third of all laptop sales.

Make up your mind, is is successful or isn't it? You were clearly talking about the Mac being a failure even now in 2013, not just in 1997. It must get tiring moving your goalposts all the time.

What's funny is that you and retro completely bypassed the real meat of my post, 3/4 of it, which is that it wouldn't be surprising if Dell pulled an IBM and focused more on enterprise (something more profitable that they're good at) and dropped their consumer division.

The Apple stuff was a sidenote in comparison, but you focused only on that because getting rageface at them is apparently way more important and productive for you.

Obsessed? No. Tired of you taking any and every Apple topic and turning it into your own clandestine soapbox. I don't know if its that you don't see yourself doing it or that you don't think anyone else notices it but you do. The word Apple is typed and out comes the evangelist.

Really think about this comment...

"Again Takin, when it comes to Apple topics, you ignore the context of the discussion entirely and throw yourself on any grenade."

I have, and he has zero idea what he's talking about when bringing up context.

If he mentions something and I and someone else (othercents in this case) shows how he is wrong, all of a sudden it is off topic and out of context even though it is specifically addressing and debunking things he said in the discussion.

Hell, I actually took things back on topic by talking about Dell, but you guys would still rather stay off-topic and have an angry circlejerk.

I made a response four posts deep into the subthread after Apple was brought up, mentioned them in passing while keeping it mainly about Dell going forward, and you still went full sperg on that little two sentence paragraph.

Lets look again at what happened here, because it happens all the time with you.

1. This is a Dell article.2. Someone mentioned "hey remember when M. Dell said this comment about Apple" ?3. A few people made a quick comment about that comment.4. Because the comment was about Apple, in comes Takin with POST AFTER POST and paragraph after paragraph of Apple soapbox material.

I mean how many paragraphs do you need to write off one comment? How many double and triple posts without even a response? You have even quad posted me before with 4 replies to one single post... And you aren't seeing the problem here? Hell, lets not even approach you admitting its a problem, can you at least see what we are talking about here? And then on top you want to come off as if you arent evangelizing Apple? You never go off like that when you disagree with a comment about any other company. Enter the word Apple and you go completely off the tracks... Seriously STFU, you arent fooling anyone.

LOL... To be clear he wasn't far off. If not for the cash bailout from MS, Apple would have had to close the doors in the 90's. And if it were just the Mac platform, it wouldn't have gone far anyhow. Apple's fortunes are iPod, iPhone and iPad related. The Mac line didn't make its "meteoric" rise from 4% to 7% marketshare until the "i" devices became popular.

The cash bailout wasn't the important part of their deal, application support, cross-licensing technologies, and settling charges out of court was.

Even in their beleaguered state in 1997, Apple was worth about $3BN in market cap and had about $1.5BN in cash. They were losing money but they'd gotten back in the black the same year by axing most of their products (printers, PDAs, etc) and reducing their computer line from dozens of product lines to only four (desktop/laptop consumer/pro).

The cash investment of $150 million dollars, which is nothing compared to their market cap and liquid assets, were restricted non-voting shares created by diluting existing stock (slightly reducing stock value for existing shareholders in the process).

It was basically funny money created out of thin air.

The deal was important but not in terms of the "investment".

Apple dropped charges against MS (important as MS was under heavy fire from the DOJ at the time) regarding the UI and stealing code from Quicktime. They did this in exchange for continued development of Internet Explorer and Office, which is actually the most important thing Microsoft did for Apple as it instilled confidence in a platform that was on thin ice.

Also important was a cross-licensing relationship that continues to this day. Microsoft licensing Apple's technologies for Windows Phone is the latest example, while Apple is one of the biggest, if not the biggest, licensees of ActiveSync.

So why do the investment in the first place if it was meaningless funny money? Simple: It was done for marketing and saving face.

Jobs is a showman, everyone knows that, and saying that Microsoft was bailing out Apple was a very flashy way to make Apple look like they were being saved, even though they were already well on the way to profitability, and it made Microsoft look like the heroes (continued Office and IE support sounds WAY boring in comparison even though it did way more to help the platform).

So yeah, it was marketing, and apparently it is so effective that people who don't know their history still refer to it. :)

As for the iPod, it did make mainstream consumers more aware of Macs; up until the mid-2000s it was primarily the platform of professionals.

If we're talking about income the iPod never came anywhere close to what the Mac generated. The Mac didn't even get surpassed by the iPhone for revenue until 2010, but everything else got superseded by it in the following years. The iPhone by itself makes more money than the higher margin Windows and Office products combined, so its obviously an extreme (and insane) outlier.